Apple’s shares surged 15 per cent on Wednesday after President Donald Trump announced a three-month pause on all the “reciprocal” tariffs that had gone into effect at midnight. The announcement brought a sigh of relief for the world’s most valuable tech company, as the tariffs would have affected its production facilities in India and Vietnam.
Wall Street responded positively to the news, adding $400 billion to Apple’s market cap, which now stands just under $3 trillion. This marks the company’s strongest single-day performance since January 1998—a time when the late founder Steve Jobs was serving as interim CEO, and three years before the debut of the first iPod. Back then, Apple’s market cap was around $3 billion.
Last week, Trump announced import taxes on all goods entering the US, marking the biggest upheaval in international trade in decades and causing stock markets to crash globally. Apple’s shares nosedived, wiping out $700 billion from the company’s market cap. The tariffs have played a major role in that depreciation. Apple is particularly vulnerable due to its reliance on consumer products—like the iPhone and Macs—which are mostly manufactured in various Asian countries.
And while Trump has announced a three-month pause on all the “reciprocal” tariffs—except for those on China—he has increased tariffs on Chinese goods to 125 per cent, up from 104 per cent, after China announced additional retaliatory tariffs against the United States earlier on Wednesday. All other countries that were subjected to reciprocal tariff rates will see those rates reduced to the universal 10 per cent rate, he said.
Although Apple still heavily relies on China—where most of its products are manufactured—the company has diversified its supply chain over the years. On Wednesday, tariffs on Vietnam were reduced from 46 per cent to 10 per cent, and tariffs on India were cut from 26 per cent to 10 per cent. Experts believe this will help Apple counter the immediate impact of the US President’s aggressive tariffs on China, allowing the company to utilise these lower-tariff countries as alternative manufacturing hubs for exporting products to the US.
Apple has already been strengthening its relationship with India, where the company is investing heavily from both manufacturing and sales perspectives. Cupertino is expanding its manufacturing network in India, taking advantage of local subsidies, a skilled workforce and a growing network of supply chain.
India plays a crucial part of the company’s effort to lessen its reliance on China, where risks have grown along with Beijing’s growing tensions with the US. This year, Apple is expected to produce about 25 million iPhones in India, according to Bank of America analyst Wamsi Mohan, who spoke to The Wall Street Journal.
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Three of Apple’s suppliers—Taiwan’s Foxconn Technology Group and Pegatron Corp., and India’s Tata Electronics—assemble iPhones in southern India. Foxconn’s local unit, based on the outskirts of Chennai, is the top supplier in India and accounts for half of the country’s iPhone exports.
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